Watchdog will assess final scheme

THE Financial Services Authority said a successful compromise offered the best chance of ending the uncertainty at Equitable Life.

John Tiner, a managing director at the FSA, said: 'We firmly believe that a successful compromise would offer the best prospect of bringing stability to the with-profits fund and improving the outlook for worried policyholders.

'But we are, of course, in uncharted territory. There is no simple template for determining the overall fairness of the proposed scheme, which needs to take account of the competing claims from GAR and non-GAR policyholders on a single pot of money.'

The FSA said it would assess the final scheme to make sure each group was being offered a fair deal for the rights they were being asked to give up.

It added that non-GAR policyholders may have claims against the society for mis-selling, though the compromise scheme was a sensible way of dealing with the issue.

Mr Tiner said if the scheme was not approved Equitable may have to carry out a review to establish if there had been mis-selling, and policyholders could take their claims to the Financial Ombudsman Service or pursue them through the courts, though they were unlikely to be better off if they did this.